Private Sector Health Insurance Business: Year-End Refresh
December 19, 2024
In their most recent filings, more than 93,000 private-sector employers reported that they offer some type of health benefit subject to ERISA [1] guidelines. These companies collectively make health benefits available to a universe of about 93 million participants. [2] The following table presents private-sector employers that reported more than 500,000 potential plan participants across the spectrum of health benefit contracts. The NEA (National Education Association) Retiree Health Plan, a professional organization representing teachers and public-school personnel across the nation, holds the top position, with the retail giants Amazon and Walmart in second and third, respectively. The remaining top positions are held either by unions, such as the International Brotherhood of Teamsters or the American Federation of Teachers, or globally operated companies, such as FedEx, AT&T, and ADP, one of many professional employer organizations (PEO) with a significant presence in the market.
Schedule A Observations
Insurance carrier business was analyzed using Schedule A [3] for benefit contract types of health, HMO, and/or PPO. To provide a high-level overview of the market, the number of insured and total premiums paid were aggregated at the parent company level (Insurer Group) for each health plan/insurance carrier record, summarized in the table below. The Insured field represents the number of persons covered at the end of the policy year, a field synonymous with covered lives or number of enrolled. The Filings variable represents the number of filings in which each Insurer Group was reported, generally the same as the number of contracts. Total Premiums are the sum of premiums paid for experience-rated and non-experience-rated contracts. It is important to note that Form 5500 definitions and reporting instructions pertaining to health benefits are broad and data are not necessarily indicative of comprehensive medical coverage.
Schedule C Observations
An analysis of Schedule C [4] data provided the following insights about insurance carrier compensation for administration of various types of self-insured benefit plans. UnitedHealth’s plans received over $2.5 billion in compensation for providing third party administrative services pertaining to health and welfare benefit contracts with private sector employers, such as those with Gray Television, Nucor Corporation, and Lifepoint Health. Elevance received over $1.2 billion in compensation, with Form 5500 filings showing Charter Communications, Bank of America, Wells Fargo, and Northrop Grumman among the company’s top employers relative to compensation paid for administrative services. CVS, Cigna, and HCSC round out the top five carriers based on compensation for administering self-insured plans, including those with Geico, JPMorgan Chase Bank, and AT&T, respectively.
Health Insurance Brokers
Within the most recent Form 5500 filings, MFA found brokers and agents received over $3.3 billion in commissions ($2.5B) and fees ($841M) for assisting with sales of various health and welfare benefit products, inclusive of health, HMO, and PPO contracts. The state of California accounts for 22% of all broker compensation, with business in the state of Texas accounting for 9% and New York accounting for 8%. Brokers in the state of Florida represent 6% of all reported fees. Additional insights about broker compensation may be researched by agency, insurer group, and employer contract using MFA’s 5500 Employer Health Plus product.
About this Data
Due to filing guidelines and companies with different fiscal year ends, this subset of Form 5500 data generally encompasses filings from 2023, with a smaller amount from 2021, 2022, and 2024, to reflect the most recent filings available.
Note: With respect to the designation of Insured Groups as parent companies, MFA makes every effort to accurately aggregate carriers by group but cannot guarantee 100% accuracy due to the lack of normalization within the filings.
About 5500 Employer Health Plus
The data used in this analysis brief was obtained from Mark Farrah Associates' 5500 Employer Health Plus. This tool has been designed to simplify the analysis of employer health & welfare benefits including medical, dental, vision, disability, and other benefits. MFA’s 5500 Employer Health Plus uniquely focuses on health & ancillary benefits purchased by private sector employers and the relationships employers have with contracted insurers, administrators, and brokers. The user interface allows for both detailed and summary level data retrieval. Data sources include Form 5500 filings and related schedules for companies that indicate they provide health & welfare benefits.
About Mark Farrah Associates (MFA)
Mark Farrah Associates (MFA) is a leading data aggregator and publisher providing health plan market data and analysis tools for the healthcare industry. Our product portfolio includes Health Coverage Portal™, County Health Coverage™, 5500 Employer Health Plus, Medicare Business Online™, Medicare Benefits Analyzer™, and Health Plans USA™. For more information about these products, refer to the informational videos and brochures available under the Our Products section of the website or call 724-338-4100.
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[1] The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. Entities such as churches, federal, state, city, and local governments are generally not subject to ERISA.
[2] “Participants,” per Form 5500 instructions, is defined as the annual count of active and former employees who are eligible for said coverage, but not necessarily enrolled. Furthermore, this field is representative of participants across all health and welfare benefits reported by plan employer sponsors, not just health, and may be duplicative. Nonetheless, this measure provides a general indication of the potential size of health and welfare benefit contracts by employer.
[3] Employers generally use Schedule A to report information about insurance carriers and benefit plans, including premium amounts and broker/agent commission details for insured plans. Although benefit contract types are indicated within Schedule A, the premium amounts are not reported separately (e.g., health, dental, vision, disability may be combined).
[4] Information about benefit plans that are self-insured is generally reported in Schedule C. In many cases, the contracted carrier or TPA (third party administrator) generates this information for the employer. Schedule C provides details on fees associated with self-funded plans that exceed $5,000. Service provider fees are reported separately for direct compensation and indirect compensation arrangements. Although MFA’s data logic strives to eliminate filings that are primarily pension plan purposed, Schedule C does not include reporting of benefit contract types. Therefore, the compensation insights should be interpreted broadly as fees paid for contracts that may include health benefits.
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